The EUR/USD finished the day sharply higher, closing up 0.55% at 1.3166. Intra-day the pair traded as high as 1.3186 but was once again unable to take out the 1.3200 level. All eyes will be on the upcoming US session, with both Construction Spending and ISM Manufacturing PMI due out at 14:00 GMT. Following this data, we will get the Federal Reserve Monetary Policy statement at 18:00GMT. However, with all the hype surrounding the upcoming economic data due out of the US, some analysts are saying not to look too much into the release and the effect on the US Dollar might be minimal.

According to Kathy Lien of BK Asset Management, “Given the recent disappointments in economic data, it will be very difficult for the hawks inside the Fed to justify hardening their call for a rate cut. In contrast, the doves will sing louder about the need for maintain the current level of stimulus. However none of these discussions are likely to appear in the FOMC statement. https://support.fxcc.com/email/technical/01052013/

Upwards scenario: Neutral hourly studies point towards further consolidation, with a break of next resistive structure at 1.3185 (R1) is required to spark stronger upside action. In such scenario we would suggest our next initial targets at 1.3213 (R2) and 1.3239 (R3). Downwards scenario: Next support level is seen at 1.3156 (S1), any penetration below it might activate downside pressure and enable lower target at 1.3120 (S2). Any further market decline would then be limited to 1.3084 (S3).

Upwards scenario: On the upside potential is seen for a break above the resistance at 1.5563 (R1). In such case we would suggest next target at 1.5590 (R2) and any further rise would then be limited to final resistance at 1.5629 (R3). Downwards scenario: Successful retest of our next support level at 1.5527 (S1) might provide sufficient momentum for the price acceleration towards to interim target at 1.5507 (S2). Final aim for today locates at 1.5481 (S3).

Upwards scenario: Possibility of market strengthening is seen above the immediate resistive barrier at 97.42 (R1). Price extension above it is required to validate our next intraday targets at 97.61 (R2) and 97.82 (R3). Downwards scenario: If the price manages to overcome our next support barrier at 97.11 (S1), we expect to see further market decline towards to our next target at 96.89 (S2) and then next stop could be found at 96.70 (S3) mark.